Mexican Peso Manages to Hold
Its Own Against the U.S. Dollar

MEXICO CITY -- While the U.S. dollar has been clobbering currencies from the yen to the euro, the once-disparaged Mexican peso has more than held its own against the greenback this year.

The peso, infamous for its 1994-95 crash, has slowly climbed to what some economists fear are dangerous heights for an economy fueled by exports. Attractive local interest rates are lifting foreign demand for pesos while foreign companies in search of cheap labor continue pouring dollars into local plants. The peso was trading late Wednesday...